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general motors

As technology advances, new cars continue to be introduced. Within the car industry, the multiple manufacturers make it a highly competitive market. Some of these manufacturers include: Ford, Honda, Nissan, Hyundai, Toyota, Volkswagen, General Motors, and many more. Each manufacturer has their personal strengths and weakness as well as targeting various segments of customers. As competition continues to increase, these manufacturers need to develop new strategies in order to obtain a larger share of the market. General Motor’s take on this new strategy is by increasing their capacity in China.

General Motor’s expansion in China will be a three year process. Within these three years, GM plans to open four additional plants, which will also create “approximately 6,000 new manufacturing jobs” (GM). With this expansion, GM and their joint ventures in China continue to increase in quality and quantity. Bob Socia, the president of GM China, stated that ““GM is a car company, but we are also a people company. You can’t build great vehicles without great talent.” GM and their joint ventures currently have 55,000 employees in China, and this number will continue to rise. By expanding in China, GM is able to find local talent “with a focus on design, engineering, R&D, manufacturing, purchasing, and sales and marketing” (GM). This emphasizes GM’s attempt to retain global talent along with learning to improve their operations with the help of China. By locating facilities globally, GM is able to provide better goods and services for their consumers as well as improving their supply chain.

Along with the increase in plants and employees, this partnership with China has pushed General Motors in a new direction. Over the next five years, GM plans to focus on SUV’s and luxury models. Bob Socia believes that

this new focus along with the expansion in China will result in a positive reaction from consumers. Socia stated that “We expect Cadillac sales to go from 30,000 last year to 100,000 in 2015” (WSJ). Although this may seem very ambitious, the new global strategy of General Motors may end in a positive result. Along with the increase in sales, GM also plans on introducing 17 new and upgraded models in China.

This expansion allows GM to improve on their manufacturing capability through the new plants, employees, and other opportunities within China with their joint ventures. Although these articles don’t include all the parts of the strategic process, they emphasize on GM’s operations process for their new strategy. However, with GM being such a large car manufacturer globally, it’ safe to assume that the other parts of the strategic process which include marketing and finance/accounting are being handled properly as well.

Currently, according to “Spot On Lists”, General Motors is ranked second in the list of the top 10 biggest car manufacturers in the world. The Volkswagen Group is number one on the list. Will GM’s expansion in China allow them to overtake Volkswagen as the largest car manufacturer in the world? Is GM’s new strategy going to result as highly as they forecast? Although the details of their strategy may seem strong on paper, will this plan be executed correctly?

Let’s face it. The economy is still lousy, and many companies are trying to find ways on how to reduce their costs. For General Motors and Peugeot-Citroen, it is time to restructure their operations.

“GM removed the head of its European operations, Karl-Friedrich Stracke, after just seven months on the job and replaced him with Vice Chairman Steve Girsky amid growing frustration with the pace of the turnaround at its European business, which includes the German Opel/Vauxhall unit” (Terlep). “Peugeot plans to eliminate 8,000 jobs, or 8%, of its French workforce, and stop building vehicles at one of France’s largest car factories in 2014” (Terlep).

So what exactly are GM and Peugeot restructuring? Both companies are restructuring their operations management, specifically their capacity. In class, we learned about design capacity and effective capacity. Design capacity is the maximum theoretical output of a system, whereas effective capacity is the capacity a firm expects to achieve given current operating constraints.

“About 30 of the 98 European auto-assembly plants owned by major car makers are operating below 70% of their capacity, levels that typically cause plants to run up significant losses. European auto makers have the plant capacity to make 27 million cars a year but will only make 20 million this year” (Terlep). In operations management terms, 30 of the 98 European auto-assembly plants have a design capacity of 27 million cars, but they are operating below 70% of their design capacity. Their effective capacity this year is 20 million cars.

In order for GM and Peugeot to match capacity to demand and effectively compete in the auto industry, they will have to close some of their factories and lay off thousands of their employees. The general environment and the task environment change dramatically every day. Companies who do not build for change will experience what GM and Peugeot are experiencing today. There is a lower demand for cars, and costs are skyrocketing because factories are not operating at their full design capacity.

If you were the chief operating officer at GM or Peugeot, how would you restructure your company and “build for change”?

*If you would like to access my article, you can click on the link below:

I think it is the right time to say good bye to the legend car, it was started since1992 but the end has come for the hummer brand, GM decide to transfer a military car to a civilian car , GM bought the Hummer model in 1999, but sales fell sharply with the image degradation of the army and the decline in car use heavy fuel consumption. The car that represents the magnitude and excessive consumption of gasoline, the car that attracted celebrities and off-road enthusiasts, as well as the wrath of fans of the environment.

The story start when General Motors has decided to cease production of Hummer H1 car, the Hummer H1 which is similar in its design Humvee jeep used by the U.S. military. Consistently and conservationists t protest against the pocket because of the high rates of consumption of fuel.
GM said that the rise in fuel prices has nothing to do decision to halt production of pocket because this issue is rarely of concern to people who buy Hummers. And will continue to produce military model of the jeep, Indiana plant in the U.S. as the company will continue manufacturing Alcklitin H2 and H3.

By 2010 the Company decides officially to stop making hummer cars at all for GM’s U.S. car production Hummer after the collapse of takeover by the Chinese. GM did not give reasons for the collapse of the attempt to sell the model to Tndzong Chinese Company, but the news said that Beijing has refused to approve the completion of the deal. The U.S. Company decided to sell Hummer production before two years ago with the disposal of a number of models produced by and request protection from creditors as a prelude to bankruptcy. The company expressed disappointment with the deal because the Chinese did not take place.

“John Smith said, vice president of the company: General Motors will work with staff in the production of Hummer dealers, and suppliers of plant to end the work in an organized and responsible“.
The company said it will continue to adhere to the owners of the car security around the world and provide service and spare parts.

The life cycle of producing hummer car went away quietly and quickly, it was an attractive car to the gulf consumer which is a huge menacing vehicle. And fit the G.M image of always having the biggest and the best brands, which was special and unique car and had attracted most of the celebrity to have a hummer. But after the new model of range rover and BMW X5, those car start to attract the people whose is looking for a luxury car. And the time has come to stop producing hummer car; the hummer car will be always in our memory and continue as an American iconic symbol.

here my question is do you think G.M will think to reproduce hummer car in the near future? And what was the real reason to stop producing it? Do you see the civilian hummer brand was a victim of the recession rather than gasoline prices?